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Author: 


Lange,  William  Endres 


Title: 


Turnover  in  the  sales 
organization 

Place: 

[Pittsburgh] 

Date: 

1922 


MASTER   NEGATIVE  * 


COLUMBIA  UNIVERSITY  LIBRARIES 
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Cernegid'  Iristuttite  of  Technology,  Pittsburg. 

Pi^tiabupghi;  CarnogAo  inotUute>   Cama^ifiL-onaii- 
tu^o  of  ^iiulillUl(Jg^4  Bureau  of  personnel  re- 
search* 
Turnover  in  the  sales  organization;  a  study  of 

the  actual  turnover  conditions  in  a  large  number 

of  national  sales  organizations  with  a  discussion 

of  causes  and  remedies,  by  William  £•  Lange... 

fPittsburgh^  Carnegie  institute  of  teohnologyi 

19&8« 

18  p.  tables,  charts,  forms.   30  om« 


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LANGE 


TUaNOYER  IN  THE  SALES  CRG/.NIZATION 


(CARNEGIE  INSTITUTE  OF  TECHNOLOGY) 


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Cidtuniria  Wininnviitp 


LIBRARY 


School  of  Business 


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TURNOVER  Itl  THE  SAIES  ORGA.NIZATION 


A  Study  of  Actual  Turnover  Conditions  in 

a  Large  Wumber  of  National  Sales 

Organizations  With  a  Discussion 

of  Causes  and  Remedies 


LIBRARY    . 
SCHOOL  OF  BUSINESS 


By 

William  B*  Lange 
Research  Assistant 


The  Bureau  of  Personnel  Research 
Carnegie  Institute  of  Technology 

Hovemher,  1922. 


All  Rights  Reserved 


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Sales  executives,  economists  and  marketing  experts  all 
agree  that  our   system  of  distribution  in  the  United  States  is 
extreme ly  inefficient  and  costly •     The  distribution  cost  of  Diany 
commodities  exeaeds  their  production  cost.      In  this  distribution 
cost  the  expense  of  operating  a    sales  force   is  often  the  pre- 
dominating factor. 

The  various  industries  of  the  country  support  an  amy 
of  400,000  salesm-en  in  order  to  bring  their  products  to  the  favor- 
able attention  of  prospective   buyers.     Each  member  of  this  army 
represents  an  investment  of  capital,  for  the  modern  salesman  must 
be  trained  ror"Tiis  work  an?  training  is  a  costly  process.     When- 
ever a   salesman  for  any  reason  fails  to  mate  good,  both  the  expect- 
ed dividend  and  the  principal  are  lost  to  his  employer.     Failures 
and  replacements  swell  by  so  much  the  costs  of  marketing  goods • 
Turnover   in  the   sales  force,  therefore,  ^*ien  it  exceeds  the  changes 
due  to  promotions  and  imavoidable  losses^    is  a  matter  for   serious 
consideration  upon  the  part  of  sales  executives. 

Is  salesman  turnover  in  the  majority  of  commercial  lines 
excessively  high?     If  so,  what  are  the  causes;  what  remedies  can 
be  applied?     These  ere  the  questions  vrhich  this  bulletin  attempts 
to  answer.     Complete  data  were  not  available  because  few  companies 
keep  accurate  records.     But  the  facts  disclosed  are   sufficient  to 
challenge  the   serious  attention  of  sales  executives  everyv/here. 
Something  mwst  be  done  to  reduce  the  high  selling  costs  caused  by 
excessive  salesman  turnover.     A  discussion  of  the  available  facts 
is  the  necessary  first  step  in  this  direction. 

In  the  beginning  of  the  Bureau's   investigation  of  turn- 
over conditions,    it  was  discovered  that  two  New  Tgrk  concerns  were 
collecting  the   same  data.     The  individuals  in  charge  of  these 
investigations  offered  to  cooperate  with  the  Bureau  in  order  to 
secure  as  comprehensive  results  as  possible.     Acknowledgment  is 
therefore  gladly  made  of  the  helpful  assistance  of  Mr.   S.   Sedelmier, 
Staff  Secretary  of  the  Alexander  Hamilton  Institute,  and  Mr. 
Theodore  £•  Damm,  of  the  Research  Department,  Joseph  Richards  Company. 


H«  G.  Kenagy, 
Editor . 


,y 


•#i 


TORNOVER  IN  SAIES  OEGAMIZATIOiS 

TABLE  CF  COTJIESTS 

PAQ? 

IS  TURNOVER  A  SEIIDUS  MATTER ^  •  •        1 

Instances  of  High  Turnover    -....• 8 

Costs  of  High  Turnover    .  • 3 

TBS  FACTS  OF  TURUOVER 

How  Data  Wore  Gathered   • •  •  •  •       4 

Results  of  Questionnaire    .•..• • •...       5 

Reliability  of  Data 6 

ANALYSIS  OF  GEKRAL  TTOSOl^R  C0ra)ITI0H3     7 

COMPARISON  OF  TURFOVER  ARlO??G  ORG^JIZATIO^^  HAI^n)LINa 

DIFFERENT  PRODUCTS     10 

COMPARISON  OF  TURlCfWBR   IN  OFFICE  SPECIALTY  OEa^MZATIONS 

WITH  TURNOVER  IN  ALL  OTHER  BUSINESSES    12 

THE  NEED  FOR  BETTER  TURNOVER  DATA 

Insufficiencies  of  Present  Data      14 

LmiTATIONS  ON  VALUE  OF  TURNOVER  DATA 16 

WHAT  TURBCfVER  RECORDS  SHOULD  BE  KEPT        18 

Record  Form  -  Turnover  of  Sales  Force 
Analysis  of  Exits  -  Termination  Record 

VALUE  OF  PROPER  RECORDS      • 18 


TURNOVER  IN  SALES  ORGAIvIZATTONS 


Is  Turnovor  A  Serious  Matter. 


/ 


.   ) 


•^> 


Is   large  tv.rnovGr  within  sales  organizations  a   serious  :• 
matter?     Evidently  it  has  not  been  so  rogardod  by  many  companies, 
for  only  a   small  per  cent  of  national  sales  organizations  havo 
given  the  matter  much  consideration.     Convincing  proof  of  this  fact 
comes  readily  to  any  organization  or  concern  which  sooks  to  investi- 
gate conditions.     For  one   reason  or  another,  most  companies  have  not 
thought  it  worth  while  to  keep  tvirnover  data .     Records  of  factory 
labor  tiornover  have  been  considered  essential  for  years;    sales  labor 
turnover  records  are   still  regarded  as  fads. 

Utiintentionally,  many  sales  executives  have  adopted  an 
indifferent  attitude  towards  the  matter.     Salesman  turnover  has 
been  uniformly  high  during  the  past  few  years  and,  as  a  result,   the 
condition  has  come  to  be  accepted  as  a  matter  of  course.     A  turnover 
percentage  which,  considered  alone,  might  have  caused  serious  concern, 
lost  much  of   its  alarming  quality  vjhen  considered  in  connection  with 
general  business  conditions  and  the  situation  in  other  companies. 

The  abnormal  conditions  since  1915  have  led  other  sales 
executives  to  adopt  a  hopeless  attitude  -  to  believe  that  high 
turnover  is  unavoidable .     The  fact  that  causes  other  than  abnormal 
conditions  majr  be  operating  within  z  sales  organization  to  cause  high 
turnover  has  not  beer^  considered.     Believing  that  abnormal  conditions 
alone  were  to  blame  a^fid  that  these  conditions  could  not  be  changed  by 
their  efforts,  these  pales  managers  have  simply  let  turnover  run  its 


-a- 


course. 


Some  executives  have  not  even  beeh  avmre  that  turnover  with- 
in their  sales  organizations  has  been  high.   In  the  press  of  other 
matters,  they  have  neglected  to  secure  the  facts.  Although  aware 
that  many  men  were  leaving  their  organizations  or  being  dropped, 
they  have  not  appreciated  how  serious  the  condition  was,  since  they 
have  not  had  figures  showing  the  turnover  in  percentages. 
Instances  of  High  Turnover. 

A  turnover  of  100  per  cent  in  any  year  indicates  that  the 
number  of  changes  in  personnel  equals  the  average  number  employed, 
and  yet  percentages  in  excess  of  this  figure  are  not  uncommon, 
especially  during  the  last  year  or  two.  A  real  estate  sales  organi- 
zation, employing  a  sales  force  v/hich  at  times  has  numbered  one 
hundred  men,  had  an  average  annual  sales  turnover  for  the  period  from 
1915  to  1922  of  over  400  per  cent.  The  percentage  of  turnover  for 

« 

each  year  is  indicated  below.. 


Year 

Average 

JJamber  On 

Total  Number 

Total 

Per  Cent 

Sai 

es  Force 

Hired 

Exits 

Turnover 

1915 

€0 

250 

200 

338 

1916 

80 

400 

320 

400 

1917 

40 

150 

110 

275 

1918 

35 

125 

90 

257 

1919 

100 

525 

425 

425 

1920 

60 

360 

300 

500 

1921 

20 

125 

105 

528 

1922 

(to 

AugO 

25 

100 

75 

518 

•*> 


Conditions  lAlth  this  organization  are  exceptional  anii  yet 
turnover  figures  in  excess  of  100  per  cent  in  other   sales  organi'* 
zations  can  be  cited.     A  notable  example  of  high  turnover  is  furnished 
by  an  organization  handling  an  office  specialty.     Since   1919  it» 


INTENTIONAL  SECOND  EXPOSURE 


-a- 


course. 


Somd  executives  have  not  even  beeh  a\vare  that  turnover  with- 
in their  sales  organizations  has  been  high.   In  the  press  of  other 
matters,  they  have  neglected  to  secure  the  facts •  Although  aware 
that  many  men  wore  leaving  their  organizations  or  being  dropped, 
they  have  not  appreciated  how  serious  the  condition  was,  since  they 
have  not  had  figures  showing  tho  turnover  in  percentages. 
Instances  of  High  Turnover. 

A  turnover  of  100  per  cent  in  any  year  indicates  that  the 
number  of  changes  in  personnel  equals  the  average  niomber  employed, 
and  yet  percentages  in  excess  of  this  figure  are  not  uncommon, 
especially  during  the  last  year  or  two.  A  real  estate  sales  organi- 
zation, employing  a  sales  force  which  at  times  has  numbered  one 
hundred  men,  had  an  average  annual  sales  turnover  for  the  period  from 
1915  to  1922  of  over  400  per  cent.  The  percentage  of  turnover  for 

« 

each  year   is  indicated  below.. 


Year 


•mi-^^ 


Averagg  Ifamber  On 
S^les  Force 


II. I  ■  t 


1915  €0 

1916  80 

1917  40 

1918  35 

1919  100 

1920  60 

1921  20 

1922  (to  AugO   25 


Total  Rumber 
Hired 


Total 
Exits 


Per  Cent 


■AMk 


Turnover 

I    .  tin* 


250 

200 

333 

400 

320 

400 

150 

110 

275 

125 

90 

257 

525 

425 

425 

360 

300 

500 

125 

105 

528 

100 

75 

518 

Conditions  with  this  organization  are  exceptional  aoiSL  yet 
turnover  figures  in  excess  of  100  per  cent  in  other  sales  orgai^i^ 
zations  can  be  cited.     A  notable  example  of  high  turnover  is  fiiTnlshed 
by  an  organization  handling  an  office  specialty.     Since   1919  lt» 


-3- 


/ 


♦-»  ^ 


percentage  of  ttirnover  has  not  fallen  below  100  per  cent •     In  fact, 
for  the   seven  months  of  1922,   the  turnovor  was  394  per  cent.     The 
range  of  t\arnover  percentages  is   shown  below. 


Year    Average  Niamber 

On 

Total  Number 

Total 

Per  Cent 

Sales  Force 

Hired 

Exits 

Turnover 

1919           36 

100 

42 

110 

1920           75 

126 

76 

101 

1921          139 

281 

181 

130 

1922  (to  AugO  117 

308 

268 

394 

This  organization  increased  its  sales  force  from  an  average 
of  38  in  1919  to  117  in  1922.     With  this  increasing  sales  force  it 
has  had  increasing  turnover.     During  the   seven  months  of  1922  alone, 
268  salesmen  left  the  company  and  308  were  added.     Conditions  such 
as  this  are  surely  worthy  of   serious  analysis. 
Costs  of  High  Turnover 

The  seriousness  of  a  high  sales  tiirnover   lies  in  its  costli- 
ness.     The  sales  manager  of  a  company_employij:]^  over  600  salesman 

states  that  eachjBalesman_r^-Prfi§^?^'*^s  an  expenditure  on  the  part  of 

J — —    — — 

the   company  of  one   thousand  dollars  for  his  training  and  supervision. 


j'--ii^w 


hxmdred  and  eighty  salesmen  left  this  con.pany  during  the  first 
seven  months  of  1922,  which  means  a  cost  to  the  company  of  |^180,000. 
This  is  a   considerable   sua  of  monify' 

Most  companies  probably  do  not  have  so  expensive  a  plan  of 
training  as  the  company  mentioned,   but  whatever  method  of  training 
is  used  involves  some  expense.     The  new  salesman  may  simply  travel 
with  an  experienced  salesman  for  a  certain  period  of  time,  or  he  may 
be  trained  in  the  aompany's  course.     In  either  event,  he  represents 
an  investment  which   is  lost  to  the  company  when  he   leaves  its  enqploy. 

Furthermore  the  new  salesman  requires  more  supervision  than 


•a. 


/ 


-♦I 


the  more  experienced,   ai^d  thus   increases  sales  costs*      In  an  organi- 
zation ^ith  a  rapidly  changing  personnel   this  item  of   increased 
supervision  cost  tecomes  of  considerable   importance. 

The  increased  supervision  cost  caused  by  a   rapidly  chang- 
ing sales  personnel  is  dwarfed,   however,   by  the  cost  of  lost  business 
due  to  high  salesmf;n  t\;rnover.     A  customer  does  not  feel  confidence 
in  a   compary  whi^h  ha 3  a  rapidly  changing  sales  persciinel.     In  the 


ia».«WWW1  ■ 


customer's  eyes,   the   ef.lesman  is  the   company*     If  the  company  changes 
representatives  rftsa     the  customer's  confidence  in  the  house  and  his 
willingness  to  bay  cannot  be  conserved  or  developed.    As  a  reault, 
business  is   lost  to  the  compary* 

Not  all  ccmpnnies  lose  a  thousand  dollars  every  time  a 
salesman  leaves,     fpr  most  companies  the   loss  may  be  conservatively 
placed  at  two  h\mdr3d  dollars.     A  company  v/hich  has  a   sales  force  of 
one  hundred  and  &  tirnover  of  thirty  per  cent,  would  lose  six  thousand 
dollars  per  year  on  this  basis.     Such  a   sum  ir  worth  saving,  and  a 
great  part  of  it  can  be  6a^-ed  by  reducing  turnover. 

Turnover  can  be  reduced  if  its  causes  are  known.  In  order 
to  discover  these  causes,  however,  sales  turnover  conditions  must  be 
studied  and  accurats  turnover  records  must  be  maintained  for  regular 
analysis. 


TBS  FACTS  OP  TURKCfVEi 


How  Data  Were  Gathered. 


One  hundred  and  fifty  national  sales  organizations  were  ad- 
dressed by  the  Bureau  and  ^sked  to  cooperate  in  an  investigation  of 
salesman  turnover  by  furnishing  their  turnovor  figures.     These  organi- 
zations were    selected  so  that  they  inducted  ccncerns  handling  many 
different  types  of  product. 


f^ 


^.5- 


/ 


.      For  the  convenience  of  the  companies  and  to  insiire 
uniformity  in  the  calculation  of  turnover   percentages,   each  company 
was  furnished  with  a  Sales  Turnover  Blank,  a  copy  of  which  is   in- 
cluded in  this  report.     Annual  data  were  asked  for  covering  the 
period  from  January  1915  to  August  1922  and  full  directions  for  all 
calculations  were  included  on  the  blank. 
Results  of  Questionnaire 

Responses  were  received  from  sixty-nine  of  the  one  hundred 
and  fifty  companies  addressed  by  the  BufeaU.     Of  these  sixty-nine 
companies  only  thirty-five  were   actually  able  to  furnish  turnover 
figures-     Several  other  companies,  though  unable  to  furnish  figures, 
estimated  general  turnover  conditiotis  vriihin  their  organiJsations  and 
manifested  interest   in  the   investigation* 

An  analysis  of  the  responses   indicates  the  wide  variety  of 
concerns  addressed  by  the  Bureau  and  the   status  of  turnover  records 
among  sales  organizations  handling  various  types  of  products. 


>•• 


TABLE  I 


ANALYSIS  OF  im  RSSPOMSES  TO  THE  BTffiRAn  QIESTIONHAIRE 


Type' of  Company 


^■"•■•■^"^w 


Number  of 
Responses 


Office  Specialties 

Automobiles 

Rubber  Products 

Life  Insur  a  nee  ^ 

Real  Estate,  Mortages, 

Stocks  fc'^Bonds 
Steel 

Clay  Products 

Heating  Equipment 

Commercial  Feeds 

Drugs  &  Drug  Store  Supplies 

Paint 

Electrical  Supplies 

Vacuum  Cleaners 

Electric  Lights 


16 
7 
5 

s 

8 

2 
2 

1 
2 
2 

1 
1 
1 


Ntanber 
Furrti  shingTigure  s 

10 
3 
1 
S 

1 
0 
2 
2 
1 
2 
0 
1 
1 
0 


X 


SAJ^ES  TDRIDVER  PEOCRD 
(Coafidontial  InforinQtion) 

COjVIPAIiy DATE 


ADDRESS  OF  COMPANY 


Important : 


Please  road  dirootions  carefully  before  recording  data.  If  you 
cannot  supply  the  data  according  to  the  headings  given,  then 
furnish  turnover  figures  as  you  have  them,  explaining  how  the 
percentage  figiire  is  secured* 


/ 


TEAR 


1915 


1916 


1917 


1918 


1919 


1920 


1921 


1922 

^to^ 

Au^ost 


AVERAGE  NUMBER  ON 
SALES  FORCE 


•^r 


TOTAL  ITOffiER 
HIRED 


TOTAL  EXITS 


PER  CEUT 
TURNOVER 


DIRECTIONS : 


Ki 


(1)  The  "average  niomber  on  e^les  force"  for  any  year  may  to 
obtained  "by  adding  the  number  on  the  payroll  at  the  begin* 
ning  of  each  month  r.nd  dividing  by  12. 

(2)  UTotal  number  hired"  means  the  entire  number  of  additi<^fi 
to'th*  sales  force  during  the  year  —  in  other  words^  tho 
men  hired. 

(5)  "Total  exits"  moans  tho  number  of  salesmen  who  loft  tho 

company  during  tho  yoar  for  any  reason,   including  discharges. 

(4)  "For  cent  turnover"  is  tho  figure  obtained  by  dividing 
"total  exits"  by  "average  number  on  sales  force". 


; 


(5)  When  tho  information  called  for  has  boon  filled  in,  mail 
tho  blank  at  once  to: 

THE  BUREAU  OF  PERS(2NNEL  RESEARCH 

-'■■'■■■'  -•  ■■         -  ■ 

CAR^GIE  INSTITUTE  OF  TECHI^LOOT 


PITTSBURGH,  BENI^SYLVANIA. 


./ 


-6- 


Tablo  I     (Continued) 


Number  of 

Number 

Tjrpe  of  C^pany                     Responses 

Furnishing  Figures 

Aluminum  Cocking  Utensils         1 

0 

Fibre  Board                                     1 

0 

Food  Products                                  2 

Roofing  Products                           1 

Novelties                                           1 

Packing  House  Products               1 

Soap                                                   1 

4B 

Candy                                                    1 

Oil  '                                                  1 

Women's  Clothing                            1 

Tobacco                                               % 

• 

Plumbing  Supplies                         1 

0 

Plate   Glass                                       1 

0 

Taps  &  Dies                                     1 

0 

Agricultural  Machines                 1 

0 

Sewing  Machines                              1 

0 

Brass  Products                                1 

0 

In  addition  to  the  figures  furnished  directly  by  thirty- 
five  companies,  data  were  received  from  the  Alexander  Ifemilton 
Institute  and  the  Joseph  Richards  Compary  who  were  also  making  an 
investigation  of  Sales  Turnover.     Tholr  data  covered  thirty-five 
companies  among  which  were   several  which  had  already  reported  to  the 
Buureau# 
Reliability  of  Data.. 

Statistics  of  txirnover  have  been,   in  general,,  unsatis- 
factory^    Ihe  small  number  of  companies  furnishing  data   is  trhown  In 
the  preceding  table..     Sven  in  those  companies  ^ere  complete  records 
are  kept,  the  presence  of  a  large  number  of  variables  may  cause  the 
sales  manager  to  deny  that  a  high  turnover  rate  has  any  significance. 
T!he  abnormality  of  the  times  and  the  aggressive  tactics  of  sales 
Managers  in  "cleaning  house"  have  caused  a  high  turnover.     Other 
variables  affecting  turnover  are  compensation,  the  character  of  the 
line,   the  methods  of  selection  and  training,  and  even  the  site  of  the 


-7- 


/ 


company.     These  variables,  however,  do  not  so  seriously  affect  the 
individual  t\irnover  ratios  as  to  prevent  the  indication  of  the 
general  tend  of  turnover  or  the  relation  of  the  individual  turnover 
ratio  to  other  ratios • 

AmiOrSIS  OF  CEKSHAL  TURBQISER  COroiTIOgS 
probably  the  best  index  of  general  sales  turnover  condi- 
tions is  the  average  yearl^r  percentage  of  turnover  for  all   the 
companies  reporting.     In  Table   II,  the  year,  the  average  percentage 
of  turnover  for  that  year,  and  the  number  of  companies  reporting  for 
that  year  are   listed. 


k 


TABIE  II 

GENEBfiL  TDRKOVER  C0NDITI013S  AS  SHOWN  BY 

AVilHAGS 

PERCENTAGE  Of  TDRTOVER 

l^umber  of  Companies       Average  Percentage 

Year 

Reporting                          of  Turnover 

1915 

12                                          41            \ 

1916 

16                                           49                ^ 

1917 

20                                           45 

1918 

24                                           51                 i 

1919 

26                                            60                / 

1920 

32                                             60               / 

1921 

33                                             77             / 

1922 

35                                            85            / 

■^  > 


»/ 


It  can  be   seen  that  during  "the   period  from  1915  to  August 
1922,  there  has  been  a  gradual  increa-se  -in  the  percentage  of  sales- 
man turnover,  though  this  may  be  the  rersult  of  the  £act  -previously 
mentioned,   -  that  the  number  of  companies  keeping  turnover  records 
increased  with  each  year.      In  1915, only  twelve  of  the  thirty-five 
companies  maintained  accurate  records*     From  then  on  there  is  a 
gradual  increase  until  in  1922  thirty-five  companies  trere  able  to 
supply  data* 


-8- 


/ 


I 


^   I 


The  general  increase  in  t\irnover   in  these  thirty-five 
companies  can  be   shown  to  better  advantage  by  the  use  of  a  chart* 
The  average  yearly  percentage  of  turnover  for  all  concerns  report*- 
ing.  Compared  to  business  conditionfi  for  the  same  period,    is  pictured 
in  Chart  !•     business  conditions  are  represented  by  Babson*s  curve  of 
business  activity-.     With  the  exception  of  the  year  1917,  the  increase 
in  turnover   is  gradual  from  year  to  year.     In  this  year  there   is  a 
slight  decrease   in  tiirnover  as  compared  to  the  preceding  year,  but 
still  an  increase  over  the  year  1915. 

On  first  thought,    it  seems  logical  that  the  curve 
representing   sales  turnover  conditions   should  be  the  reverse  of  that 
representing  business  activity.     As  business   improves,    it  would  seem 
that  the  turnover  among  salesmen  should  grow  less  and  when  business 
is  retrogressing  turnover  should  increase.     In  times  of  business 
activity  a  seller's  market  prevails,    sales  are  easily  made,  and  men 
of  lesser  ability  can  hold  their  jobs.     In  times  of  depression,  with 
sales  difficult  to  make,  these  poorer  men  are  dropped  and  swell  the 
turnover  percentages. 

Chart  I,   indicates  however,  that  for  the  period  under  con- 
sideration, turnover  conditions  in  sales  organizations  were  not  the 
reverse  of  business  conditions.     Despite  the  business  activity  of 


the  years  1915  to  1919  inclusive,  t\irnover  continued  to   increase. 


This  whole  period  -was  abnormal,  perhaps,  due  to  war  conditions* 

One  company  reports  that  37  per  cent  of  the  salesmen  who 
left  their  employ  in  1917,   entered  military  service.     Anothej 
reported  that   19  per    cent  of  the   salesmen  employed  frcoj  1914  to 
November  19J.B,   left  to  go  to  war. 


I 


T 


> 
0 
C 

w 

0 

tp 

t 

0 

a. 


< 


IbO 


I^O 


t-K> 


t3o 


IZO 


uo 


IOC 


Chart  I 

Comparison  of  Sales  TurT^over  with    Business  Activi+M 


Curve       r<)p 


noveir 


■j^_ 


Curve    o-f 
TTcTivT^^P 


Business 


( 


I 


-9- 


During  191S,  although  the  war  wriS  over  and  business  "wao 
booming,  salesman  turnover  continued  to  increase.     The  demand  for 
salesmen  was  very  great  and  the  competition  between  companies  for 
their  services  caused  them  to  jump  from  one  organization  to  another 
as  larger  compensation  was  offered.     For  this  reason,  largely,  ttarn- 
over  continued  to  increase  despite  business  activity. 

Nine teen-twenty  and  1921  were  years  of  business  depression. 
During  this  period  salesman  turnover  increased  rapidly.     Sales  were 
difficult  to  make  and  those   salesmen  who  had  only  the  period  of  the 
war  as  a     beekground  of  experience  could  not  meet  the  conditions 
that  existed.     Many  of  the  older   salesmen  who  had  became   spoiled  by 
the   "easy  sales"  of  the  preceding  years  could  not  accustom  them- 
selves to  the  new  state  of  affairs  and  were  dropped  also. 

The  largest  cut   in  sales  organizations  came  in  the  early 
part  of  1922.     At  the  beginning  of  the  year  most  sales  organizations 
adopted  an  aggressive  policy  and  definitely  "cleaned  house".     As  one 
sales  manager  expressed  it  •'We  will  continue  to  have  a  large  turnover 
until  we  have  built  up  our  organization  to  one  thousand  salesmen  who 
will  be  hardboiled  and  veterans".     This  aggressive  policy  is  reflected 
in  the  1922  figures. 

The  turnover  figures  for  the  first  part  of  1922  are  undoubt- 
edly higher  than  the  figures  for  the  entire  year  will  be.     From 
present  indications  it  seems  that  the  turnover  ratio  for  1922  will 
not  greatly  exceed  that  of  1921  while   the  turnover  for  1923  vdll  pro- 
bably be  much  less.     In  other  words,  general   salesman  turnover  con- 
ditions are   improving. 


«i  7 


f 


-10- 


\ 


COMPARISON  OF  TORIJQVEB  AM)NG  OiRGAKIZATIOMS 
HAaDLIITG  EUFFEREITT  FRODDCTS 

I    ■  I     ■    ■    P  ■   I    I    I     ■  ^>»  •■■■■■■ 

Tlhe  average  turnover  of  a  large  number  of  sales  organi- 
zations is  indicative  of  general  tendencies  in  salesman  turnover, 
but  of  little  value   in  considering  the  turnorer   in  any  particular 
line  of  business.     Organizations  handling  similar  products  are 
affected  in  the   same  manner  by  general  conditions  and,  other  things 
being  eq\aal,   should  tend  to  have  the  same  percentage  of  sales  turn- 


over 


The  average  s<?.losman  turnover  in  a  largo  number  of  sales 


organizations,  affords  a  means  by  which  sales  executives  may  check 
up  their  o:m  turnover.  If  the  turnover  for  any  one  company  greatly 
exceeds  the  average  for  a  large  number  of  organizations  handling  a 
similar  product,  the  causes  for  such  high  turnover  must  be  sought 
within  the  company  itself. 

The  turnover  in  the  various  companies,  listed  eccording 
to  product  sold,  is  given  in  Table  III.  Such  few  companies  handling 
any  one  type  of  product  reported,  Tvith  the  exception  of  office 
specialties,  that  the  percentages,  although  interesting,  do  not 
indicate  general  tendencies  in  these  types  of  oganizations. 


*> 


-11- 


TABIfi  III 


BBRCENTAGE  OF  TURNOVER  FOR  VARIOUS  TYTES  OF  COMPAl^HES 


f 


•Type  of  Product 

:   No^  of 

;■  ■ » 

• 

9 

.... 

... 

:       Handled 

:  Companies 

:1915 

:19X6 

:1917 

:1918 

:1919 

:1920:: 

1921:1922: 

Real  Estate 

:         1 

:  333 

;  400 

:  275 

;  «89 

:  425 

:   500: 

•                    • 

525:   515: 

Oil  Company 

:         1 

232:    108: 

Rubber  Products 

:         1 

:     60 

:     80: 

:     50: 

170:    189: 

Candy 

:         1 

:     83: 

68 :     89 : 

Roofing  Products 

I         1 

:     59: 

93 :     52 : 

Automobiles 

:        8 

;     45i 

!     8li 

'.     57; 

i     62: 

:     56: 

69:   111: 

Office  Specialties 

:       10 

;     15. 

:     30: 

;     30; 

:     52: 

:     60: 

:     58: 

70:     88: 

Soap                                      1 

:        1 

;     38j 

;     51: 

:     51; 

;     47: 

:     69: 

:     80: 

58:     51: 

Blectrioal  Supplies        i 

:         1 

:     38: 

I     44: 

;     60: 

I     62: 

;     37: 

:     57: 

57:     47: 

Packing  House  Products : 

;        1        J 

:     48: 

;     50: 

42:     60: 

Commercial  Feed                j 

:        1        i 

:     22: 

39 :     53 : 

Life  Insurance                  j 

3 

;     33: 

:     67: 

:     51: 

;     34: 

\     42; 

;     38: 

35 :     40 : 

Heating  Iquipnent            \ 

(        2 

:       0: 

12! 

25; 

37: 

15: 

17: 

27:     41: 

Women's  Clothing             \ 

1         : 

.     2fT 

E     16: 

22; 

18: 

.     11: 

31:     50: 

Novelties                            j 

1         : 

•     18: 

21; 

20; 

18: 

.     38: 

9: 

17:     33: 

Drugs                                    J 

2         : 

5: 

10: 

9j 

12: 

20: 

27: 

25:     23: 

Clay  Products                    j 

2         : 

0: 

0: 

17; 

51: 

15: 

18: 

22:     35: 

Food  Products                    : 

1         : 

44: 

43 :     40 : 

Vacuum  Cleaners               : 

1         : 

« 

166:  230: 

•                    • 

Several  companies  estimated  their  turnover  figures.     These 
figures  are   shown  in  Table  IV.     Estimated  figures  are,  as  a  rule,  too 
Icfvr  since   such  companies  tend  to  minimize  the   importance  of  turnover. 
Such  estimates  are  presented  for  twenty-one  companies  representing 
fourteen  different  lines  of  business.       A   comparison  of  the  figures 
with  those  for  similar  lines  in  Table   III  show  that  the  estimates  are 
very  low,  on  the  average.     Altogether  the  figures  do  not  form  a  basis 
for  reliable  conclusions. 


»^  / 


•12- 


TABtE  IV 


ESTIMATED  TURlPDTER  IN  FOURTEEN  LINES 


Per  Cent 

- 

Tvpe  of  Product 
Storage  Batteries 

Turnover 
50 

Period  Covered 

Past  two  years 

Machinery 

50 

1921 

Aluxninun  Goods 

48 

Past  year  and  a  half 

Insurance 

44 

1921 

Weighing  devices. 

sea 

les,   etc 

u         25 

Annual  figure 

Sashes  and  door6 

25  , 

Annual  f  igvire 

Electrical  applisncee 

5 

20 

Annual  figure 

Corsets 

15 

Annual  figure 

Hardware 

12i 

Annual  figure 

Electrical  vehicle 

6^ 

hoists. 

etc.     10 

Annual  figure 

Metal  beds 

8 

Annual  figtire 

Buttons 

.  6 

Annual  figure 

Corrugated  BoxeA 

3  to  5 

Annual  figure 

Flour 

3  to  5 

Annual  figure 

CaiPARISON  OF  TURNQVES  IN  OFFICE  ^CIALTY  0RGA.NI2ATI0NS 
WITH  TURNOVER  IN  ALL  OTHER  BUSINESSES 


k 


Ten  office  specialty  organizations  furnished  their  turn- 
over data.     From  these  data  accurate  conclusions  can  bo  drawn  as  to 
turnover  conditions  in  this  field.     Table  V  compares  the  annual 
average  percentage  of  turnover  for  office  specialties  ^vith  the  turn- 
over in  all  other  lines  represented  in  Table  III. 


TABLE  V. 


COMPARISON  OF  TURNOVER IM  OFFICE  SIECIALTY  SAXES  ORGAMZATIONS 

TO  TtteNcMft  ilf  bTHfeft  SALES  tfkd^iikiim 


i«B*a*i 


^fj 


Type 


Office  Specialty 
Other  businesses 


:1915! 

11916; 

:  1917:1918: 

:  15   1 

:  30  ! 

•  • 
:  30  :  52   : 

:  47  i 

:  54  i 

r  51   X  51   : 

»          %          • 

1          •          * 

1  •  • 
1          •          • 

1919:1920:1921:19221 


60  :  68 
55   ;  61 


> 


-13- 


This  same  information  is  pictured  in  Chart  II »    During  1915, 
1916,  and  1?1T^  turnover  wa^  considerably  higher  in  all  other  businesses 
than  in  office  specialty  organizations.     In  1918,  however,  turnover  in 
the  office  applicance  group  increased  considerably  and  from  then  on 
remained  as  high  or  higher  than  the  turnover   in  other  businesses. 

During  the  period  of  prosperity  it   seems  evident  that  many 
companies  purchased  all  sorts  of  office  appliances,  v/hereas  in  less 
prosperous  times  they  would  not  have  done  so.     The  demand  for  office 
specialties  caused  expended  sales  forces  as  vroll  as  expanded  manufactur* 
ing  facilities.     The  fact  that  expansion  in  office  specialty  organi- 
zations was  much  more  rapid  than  in  organizations  handling  other  types 
of  products,   is  illustrated  in  Chart  III. 

The  chart  shows  the  expansion  of  office  specialty  sales 
organizations  and  all  other  organizations  in  terms  of  their  size  in 
1920.     The  year  1920  is  used  as  a  base  since    seme  of  the  companies  did 
not  report  figures  previous  to  this  time. 

Rapid  expansion  by  office  specialty  companies  naturally 
resulted  in  hi^  salesman  turnover.     Salesmen  were  scarce  and  many 
men  lA^re  hired  who  could  not  become   salesmen.     This  was  true  of 
organizations  selling  other  types  of  product  but  more  true  of  office 
specialty  organizations* 

Figures  for  individual  office  appliance  companies  furnish 
some  interesting  variations  from  the  general  averages  given  above. 
Such  figures  are  given  in  Table  VI. 


«  / 


-> 


A 


4 


Chart  H 
Companson  of  Turnover  in   Office  5pecia)t<^  Sales  Organizations 

TurpOYer  in  other      ^'^*^     Sales  0r9ani7crtjons 


IXO 


l«)»5 


'l(o 


'It 


'ie> 


'19  't-O 

Ye^r 


•»! 


'ZZ 


>*^ 


T 


IT  no 

0  loo 

O 

a  9o 


80 


Chdrt  HI 

Campcnrison  of  the  Expansion  of  Office 
The    Expansion      of   o^her       5al 


5pecid)t<^   Sdles   Onjanizotioiis 
es    Organizations 


o 


^ 


bO 


50 


V 

5  so 


0. 


;lo 


lO 


>^ 

Office     S 

oeci<i)  i'les 

• 

/ 

All      o^htr 

busiviess«s 

<?^ 

\ 

^^ 

/y 

^Office 

S|D«Cl^lTl« 

\ 

y 

• 

y 

r 

^ 

— _ 

/ 

• 

^ 

• 

- 

1915 


lft> 


•IT 


•18 


19  '^O 


Jt.1 


^x 


-14- 


TABLE  VI 


SAT^SMAN  TDRKOfER  IN  OFFICE  APPLIANCS  COWPANIBS 


•          * 

i                         * 

:A'veras:e  for 

Prodxict 

:1915: 

:1916: 

:  19171 

r 1918 J 

:1919: 

1920:1921: 

:1922 

:Period  of  Record? 

Record  system                                \ 

:     3   : 

I     4  : 

:     6   : 

1     5    J 

;     7   : 

6:8: 

;     11: 

6.           : 

Record  System                               J 

:     -  : 

I       -     ! 

;     -  : 

•  : 

;110  : 

101   ;130   : 

:   394: 

184,           : 

Duplicating  machine                   : 

:     -   ' 

:     -   : 

;  43   : 

;   107: 

:  51   : 

54    :  48   : 

53; 

56*           : 

Duplicating  machine                     i 

:  27  J 

:   54   : 

;  24   : 

r     27! 

J   88   : 

95    :112    : 

.     60: 

60.           J 

Adding  &  Calculating  Machines 

- 

-    ! 

;     -   : 

-: 

•  : 

48   :  62   : 

.     «3: 

51.            1 

Adding  &  Calculating  Machine: 

:     -  ; 

;     -  : 

.  29   ; 

;     21: 

;  33   : 

36    :   31   : 

.     37: 

31, 

Adding  &  Calculating  Machine; 

:     -  ; 

;     -  ; 

;     -  : 

;     81: 

:   97   : 

87   :147   : 

:   128: 

108 .           : 

Adding  &  Calculating  Machine; 

;     -  ; 

;     -  : 

r     *  : 

-: 

-  : 

94   :  54   : 

:     80: 

76.           : 

Filing  Equipment 

:    .♦  i 

:  U  : 

.  46   : 

:     68: 

:  30  : 

21  :  39   : 

.     40: 

:             40.            : 

Cash  register                               : 

»     ••  1 

I     ••  < 

• 

►       •: 

•  • 

•          • 

•                                  4 

32: 

32. 

♦Fi^es  for  1922  are  on  a  yearly  basis 


It  will  be  noted  that  there   is  one    instance  of  a  very  low  annual 
turnover.     V/ith  this  exception  no  one  of  the  ten  ccmpanies  reported 
a  turnover  of  less  than  20  per  cent  for  any  year  since  1915   (   or 
since  records  have  been  kept.)     In  fact,  ^vhen  the  averages  for  the 
entire  period  are  taken,  the  figures,  ^vith  this  same  single  exception, 
are  all  above  30  per  cent.     From  this  point  they  range  all  the  way  to 


184  per  cent. 


THE  NEED  FOR  BETTER  TURNOVER  DATA 


Insufficiencies  of  Present  Data 

^ny  sales  organizations  maintain  no  records  of  turnover. 
Twenty-nine  companies  addressed  by  the  Bureau  wore  \inable  to  furnish 
turnover  data  for  various  reasons.     An  analysis  of  ttese  reasons 
discloses  the  fact  that  most  of  these  companies  have  no  records  of 
t\irnover,   or  their  records  are  unavailable. 

"Our  sales  force   is  too  small"  or  "Our  turnover  is  negligible' 
"Were  the  reasons  advanced  by   six  compRnies  for  not  fxarnishing  turnover 


-15- 


r 


-I 


data*     Ten  oompenies  reported  that  they  kept  no  records  at  all  or 
that  their  records  -were  not  in  the  proper  form.     Three  other 
Gompaniesy  although  keeping  records »  found  that  the  data  wenr  so 
scattered  thab  their  compilation  would  involve  considerable  clerical 
work.     In  other  words,  nineteen  of  the  twenty-nine  companies  eithsr 
have  no  records  at  all,  or  their  records  are  for  most  purposes  un- 
available.    It  is  also  very  likely  that  a  large  number  of  the 
companies  which  did  not  reply  to  tho  Bureau*s  request  for  information 
failed  to  do  so  because  they  had  no  records* 

Many  companies,  although  keeping  turnover  records,  get 
little  benefit  from  them*     In  most  such  cases  the  records  are  not 
easily  available*     One  company  reported  that  as  soon  as  their  pay- 
roll clerk  gathered  the  figures  on  turnover,  thsy  would  forward 
these  figures*     This  company  bought  that  it  was  keeping  turnover 
records  but  actually  it  was  not*     The  payroll  clerk  had  probably 
.  seldom,   if  ever-^  been  asked  to  compile  t^e  information  from  the  pay- 
roll for  the  benefit  of  the  sales  executive  •     The  information  was 
all  there  but  probably  was  never  used* 

Txirnover  records  which  are  merely  kept  and  are  not  analyzed 
are  of  little  value*  Companies  are  rare,  however,  who  analyze  their 
records  and  really  attempt  to  deternine  what  is  causing  turnover*  A 
ferw  of  the  companies  submitting  data  to  the  Bureau  included  analyses 
of  a  more  or  less  general  nature*  A  consideration  of  these  analyses 
will  be  interesting* 

In  •  single  year  one  company  lost  forty  men*     8ighteen  of 
these  men  had  a   service  record  of   less  than  one  year,  while  twenty- 
two  had  served  more  than  a  year  with  the  company*     The  reasons  given 
for  dropping  these  men  were: 


-16- 

Lack  of  character ••  7  men 

Lack  of  ability 22  men      . 

Lack  of  industry 4  men 

Lack  of  courage   ••• 1  man 

Lack  of  personality 2  men 

Unavoidable ••  4  men 

Of  fifty  men  hired  in  one  year  by  a  certain  company, 
twanty  failed.  The  reasons  for  their  failure,  as  given  by  the 
company,  ivere: 

Lack  of   industry  •....« 9  men 

Failure  to  follov/  instructions  1  man 

Lack  of  tact .* 2  men 

Lack  of  stick-to-iti*Bness  ...  2  men 
Lack  of  confidence  in  closing.  1  man 
Lack  of  kno?/ ledge  of  line  ....  2  men 
llnable  to  withstand  counter 

offenses   • •.••  2  men 

Dishonesty   1  man 

Another  company  hired  118  men  from  1914  to  1918.     What 
happened  to  those  men  dtiring  this  pc3riod  is  shovm  below: 

19jJ  entered  the  war. 

18^  v/ere   let  out  as  incompetent. 

19^  quit  of  their  own  accord  (some 

would  have  been  let  out). 
44jJ  remained  with  the  compare • 

These  analyses  all   indicate   the  reasons  for  vvhich  the 
company  dropped  certain  men,  but  they  do   not  indicate  the  reascais 
for  which  men  voluntarily  left  the  company  -  that  is  reasons  for 
salesman  turnover  which  are  chargeable   to  the  company  -  though  such 
reasons  are  probably  more   important  than  the   others. 

LIMITATIOHS  OH  VALUE  OF  TURITOHER  DATA 

To  truly  interpret  turnover  data  the  policies  of  a  company 
and  the  conditions  of  business  at  the  time  must  be  considered*  Turn- 
over data   is  limited  by  both  of  these  considerations. 


-17- 


i 


The 


markod 


compensation  scheme  employed  by  a  company  has  a 
effect  upon  the  tiarnover  of   sslesmen.     In  times  of  poor  business, 
the  commissions  earned  from  a  few  sales  are,   in  most  cases,   insuffi- 
cient to  support  a   salesman.     The  rate  of  commission  per  sale  is 
usually  set  so  that   in  normal  times  the  salesman  earns  a  fair  wage, 
but  it  is  not  a  measure  of  the  value  of  the   sale  to  the  organization. 
Therefore   in  times  of  depression  the   salesman  on  a   commission  basis 
is  not  receiving  the  reward  his  services  justify.     He  becomes  dissati- 
sfied leaves  the  company. 

A  straight  salary  for  salesmen  often  decreases  turnover. 
One  sales  manager  recommends  a   combination  of  the  commission  and 
straight  salary  plan.     He  uses  a  commission  basis  with  a  drawing 
account.     By  using  such  a  scheme  he  feels  that  the  high  turnover 
common  to  the  conn  is  si  on  scheme  of  compensation  can  easily  be  halved. 

Companies  employing  a  "hit  or  miss"  scheme  of   selecting 
salesmen  are  certain  to  have  a  higher  percentage  of  turnover  than  a 
company  using  very  careful  scientific  methods.     The  effect  of  poor 
selection  upon  turnover  is  illustrated  by  results  in  a  litho^^raphing 
company  "which  maintains  a  training  coxirse  for  its  salesmen.     Out  of 
every  six  men  whom  they  select  and  train  only  one  man  actually  makes 


:ood. 


^  ; 


Insufficient  training  and  si 


S6rle  smen  are 


probably  as  much  to  blame  as  poor  selection  for  causing  high  turnover. 
Neither  training  nor  supervision  has  been  developed  in  terms  of  the 
actual  elements  of  the  salesman's  job.     He  does  not,  therefore,  as  a 
rule  receive  specific  help  in  the  things  which  are  most  difficult  for 
him  to  do.     Then  again,  the  salesman  is  often  turned  loose  on  his  on 
resources  too  soon.     He  does  not  have  the  necessary  confidence  in  him- 


-18- 


86 If  Brd,  as  a  result,  he  fails* 

Adverse  business  conditions, of  course,  limit  the  value  of 
turnover  data.     Increasing  turnover   naturally  occurs. in  times  of 
business  depression,  and  is  to  be  expected.     However,   since  it  is  to 
be  expected,  an  increase  in  turnover  which  is  really  too  large  is 
often  disregarded. 

WHAT  TURNOT^R  RECOHDS  SHOULD  BE  KEPT? 

Every  sales  organizatiSn  should  keep  a   record  of  its  turn- 
over.    This  record  should  be  kept  on  a    separate  form  provided  for  the 
purpose.     It  is  then  always  available   for   reference   and  the  trend  of 
turnover  is  always  known.     A  mere  record  of  exits  indicated  upon  the 
payroll  is   not   sufficient  as  it  is  not  easily     available. 

A  simple  form  for  recording  and  analysing  turnover  data 
was  devised  in  1918  by  the  Bureau  of  Personnel  Research,   (at  that  time 
the  Btareau  of  Salesmanship  Research.)  for  its  cooperating  companies, 
and  has  been  successfully  and  profitably  used  by  many  of  them.     A  copy 
of  this  blank  is  included  in  this  report. 

Another  type  of  turnover  record  is  illustrated  by  the 
Termination  Record  shown.     This  form  was  devised  by  the  Life  Insurance 
Sales  Research  Bureau  of  Carnegie   Institute  of  Technology  for   its 
thirty-seven  cooperating  companies.     With  such  a  method  of  analysis,  a 
cOTipany  can  determine  very  accurately  the  real  facts  about  turnover. 


VALDE  OP  raOPER  RECORPS 


-k. 


The  value  of  proper  records  lies  in  the  fact  that  such 
records  make  reduction  of  turnover  pbssible  by  indicating  its  eauses 
If  the  turnover  records  of  a  company  show  that  a  large  part  of  the 
salesmen  lemming  the  organization  are  leaving  because  of  the 


^ammsm 


Form  1100.  500-3-21. 


\ 


/ 


TURNOVER    OF    SALES    FORCE 


V 


(Name  of  Firm) 


(Year) 


READ   BOTH 

SIDES  < 

CAREFULLY  BEFORE  FILLING 

IN  THE   RECORD 

CHANGES  IN  SALES  FORCE 

Totals  (or  Year 

January         February 

March 

April 

May 

! 

June              July             August 

Sept.       1    October      November 

December 

TOTAL  ENTRANCES 

1 

New  Employees 

i                       i 

i 

1 

; 

1 

Re-Employed 

'            \           i 

]                      1                     ,               .      , 

1 

'  Transferred  from  other  Departments 

■      ■■      ■  '                 ■     '    -       .      :                      !       ■■    ■— 1 

1                                            '■     .                 ^ 

TOTAL  EXITS 

1                                                                                                                            ....   —      ' 

i                       i                                                                                           i 

NUMBER  ON  PAYROLL  at  beginning  of  Month 

i                                     i                                                                                                            .                                   '            ■                       i                                   ■                                   ;                                   , 

INCREASE  (or  the  Month 

t 

1 
1 

DECREASE  (or  the  month                                                     « 

J 

1                       i 

i           I 

1                      1 

1 

AVERAGE  NUMBER  OF  SALEIS  PEOPLE  on  the  oavroll  (or  the  year.     (Add  the  number  on  the  oavroll  at  the  betrinnintf  o(  each  month  and  divide  by  12.) 

( 

) 

GENERAL  PERCENTAGE    OF   TURNOVER-       niv;(l#>  »h(>  tntnl  #>xi(s  for  th#^  vf>«r  hv  \V^  t^vt^rtat^  niimh#>r  of  s«I<^«  neonle  on   the  navroil   (or  the  vear. 

( 

) 

-   r        r- 

ANALYSIS  OF  EXITS 

Totals 

LENGTH    OF    SERVICE 

Less  than  1  month 

1  to  3  months 

3  to  6  months       '      6  to  12  months 

1  to  2  years               2  years  or  more 

A.  TRANSFERRED  TO  OTHER  DEPARTMENTS 

I 
1 

B.  TEMPORARILY  LAID-OFF  (Totals) 

1 

1                                                                                                                                                                     : 

Regular  Seasonal  Change 

Government  Service 

Other  External  Causes 

1                                         , 

C.  LEFT  (Totals) 
Death 

1 

i 

Health  or  Age 

Family  Changes 

1 
1                                                                                  t 

Dissatislaction  with   Pay 

't 

Other  Dissatisfactions 

1                       -              '                                      ■                                                                      ,  ... 
!                                                                               ;                                        t 

D.  DROPPED  (Totals) 

Misconduct 

:                 '                 i 

Poor  Sales  Ability 

Miscellaneous  Reasons 

1 

1                                         1 

i 

1 

How  many  of  your  sales  force  at  the  end  of  the  year  were  being  paid  only  on  a  commission  basis?  (- 
Both  salary  and  commission?  ( ).        Both  salary  and  bonus?  ( ),       Other  Plan? — 


-).       Only  salary?  (- 

( 


). 

-). 


v-' 


EXPLANATION  OF  FORM 


X 


This  form  is  submitted  to  each  co-operating  member  of  the  Bureau  of  Personnel  Research 
for  an  analysis  of  the  turnover  among  its  sales  force.  ^ 

If  the  various  items  are  not  at  present  recorded,  the  analysis  of  the  turnover  may  be  carried 
out  as  far  as  your  data  permit.  Complete  records  will  greatly  increase  the  value  of  the  analysis  when 
the  turnover  is  large. 

Turnover  in  the  sales  force  (THOSE  ACTUALLY  ENGAGED  IN  THE  WORK  OF  SELLING)  is  here  defined  as 
the  change  in  personnel  brought  about  by  exits  from  that  force  during  a  given  period. 

To  compute  the  GENERAL  PERCENTAGE  OF  TURNOVER,  divide  the  total  number  of  exits  from  all 
causes  during  the  year  by  the  average  number  on  the  payroll  during  the  year.  This  is  the  method 
proposed  in  1917  by  the  Committee  on  Employment  Plans  of  the  National  Association  of  Corpora- 
tion Schools. 

The  expression  "on  the  payroll"  does  not  refer  to  any  particular  method  of  remuneration. 

If  the  sales  force  is  separated  into  widely  different  groups,  c.  g.,  part-time  or  full-time,  com- 
mission or  salary;  or,  with  insurance  companies — industrial  and  ordinary — ,  use  a  separate  blank  for 
each  group  or  class  which  it  is  desirable  to  study  separately. 


Copyright  1022 

Life  Insurance  Sales  Research  Bureau 

Form  1-40    2M-5-22 


Life  Insurance  Co. 


General  Agent  Reporting 


Agent's  Name.-. 


TERMINATION  RECORD 

(To  be  filled  out  for  each  agent  leaving  the  company) 

Agency. 


Full  Time  (     ) 
Part  Time  (     ) 


Date  of  Contract _ Date  of  Termination 


? 


Agent's  paid-f or  premiums  during  each  of  his  last  six  months : 

1st  month  I..... 2nd  month  ? 3rd  month 

4th  month  $ 5th  month  $ _....- 6th  month  (last)  $ 

Was  agent  entirely  financed  by  General  Agent  (     )  partially  financed  (     )  or  paid  commission  only  (    )  ? 

Territory      -Was  it  city  (     )  country  (     )  or  small  town  (     )  ? 

1.  Did  agent  resign  voluntarily  (     )  or  at  request  of  General  Agent  (     )  ? 

2.  Was  agent  earning  a  living  at  selling  life  insurance?    Yes  (     )     No  (     ). 

8.    Was  termination  caused  by  death,  old  age,  ill  health,  marriage,  or  removal  from  locality?      Yes  (    ). 
No  (     ).    If  yes,  which? 

4.  Was  agent  undesirable  for  such  reasons  as:    financial  irregularity,  conduct,  disloyalty,  or  other  weak- 
ness of  character?    Yes  (     ).    No  (     ).    If  yes,  which  ? - - 

5.  Was  he  a  graduate  of  any  training  course  in  life  insurance?    Yes  (     ).    No.  (     ).    If  so,  which? 


6. 
7. 
8. 

9. 


On  the  average,  how  many  hours  per  day  did  agent  work  at  soliciting? 

On  the  average,  how  many  interviews  per  day  did  he  have? - 

How  many  times  during  his  last  two  months  of  active  work  did  you  or  other  agents  accompany  him  in 

soliciting? days. 

Was  agent  assigned  to  anyone  for  joint  work  or  supervision?     Yes  (    ).    No  (    ).     If  so,  to  whom? 


j»  I 


10.  Is  agent  indebted?    Yes  (  ).    No.  (  ).    If  so,  for  how  much?    $ - - - 

11.  What  is  his  general  financial  condition?    Serious  debts  (     ) ;  slightly  in  debt  (     ) ;  just  clear  (    ) ;  mod- 
erate  (     );  well  fixed  (    ). 

12.  Has  all  outstanding  business  been  settled,  so  that  bond  can  be  cancelled?    Yes  (     ) ;  No  (     ). 

13.  State  the  line  of  work  he  has  taken  up : 

Former  occupation,  namely - - - 

New  occupation,   namely -- 

Agent  for  another  life  company,  namely. - - - 

General  agent  or  manager  for  another  life  company,  namely. 

14    Is  cancellation  of  agent's  license  recommended  ?    Yes  (      ) .    No  (     ) . 


'-L 


(OVER) 


Analysis  of  Termination  Causes 

Indicate  your  answer  to  each  question  below  by  making  a  cross  (X)  on  the  line  just 
where  you  think  it  ought  to  be.  For  example:  in  question  1,  if  the  agent's  appearance  did  not 
quite  justify  a  cross  at  "Created  fine  impression",  but  was  a  little  better  than  would  be  in- 
dicated by  "Good  appearance",  put  the  cross  on  the  line  somewhere  between  these  two  places. 


1.  How  were  prospects  im- 
pressed by  agent's  appear- 
ance (as  shown  by  facial 
expression,  physique,  neat- 
ness and  manners)  ? 


Created  fine 
impression 


Made  a 

good 

appearance 


Often  made  an 

unfavorable 

impression 


Made  a 

poor 

appearance 


2.    Did  agent  impress 
prospects  by  his 
sincerity? 


Left  distrust 
as  to  his 
sincerity 


Seemed  to 
exaggerate 


Usually 
created 
confidence 


All  he  said 
was  taken  at 
face  value 


3.    What  was  agent's  attitude 
towards  supervision  or 
suggestions? 


Sought  for 
suggestions 
and  help 


Welcomed 
suggestions 
when  offered 


Indifferent 

to 

suggestions 


Objected  to 
supervision 


4.    How  successful  was  he  in 
locating  prospects?  Did 

he  strike  out  for  himself? 


Waited  to  be 
directed.     Had 
to  be  told. 


Often  ran 
short  of 
leads 


Usually  well 
supplied  with 
prospects 


Had  exceptional 
**nose"  for 
prospects 


5.    To  what  extent  did  he  plan 
his  interviews  and  study 
his  prospects? 


Made  careful 
preparation 


Used  information 
readily  available 


Made  slight 
preparation 


Interviewed 

without 

r.eparation 


6.    How  well  did  he  know 
life  insurance? 


Had  thorough 
knowledge 


Quite  well 
informed 


Often  relied 
on  manuals 
or  rate  book 


Had  scant 
information. 
Made  blunders 


7.    How  did  he  like 

meeting  and  persuading 
people? 


Strong  dislike 
for  s(Miciting 


Showed 

some 

aversion 


Took  it  as 
a  matter  of 
course 


Enjoyed 
soliciting 


8.    To  what  extent  was  he 
sold  on  life  insurance  as 
a  profession? 


Never  really 
believed  in 
profession 


Some 
faith  in 
profession 


Thought  well  of 
profession 


Was  sold 
100  per  cent 
on  profession 


9.    How  hard  did  he  work 
at  selling  life 
insurance  ? 


Loafed  on 
the  job 


Tended  to 
take  things 
rather  easy 


Worked 
systematically 


Was  a 
consistent, 
hard  worker 


10.    What  was  the  attitude 
of  agent's  wife  or 

family? 


Enthusiastic 


Favorable 


Did  not  en- 
courage or 
cooperate 


Antagonistic 


-r 


-18- 


*   /' 


compensation  plan,  turnover  can  be  reduced  by  changing  the   scheme 
of  compensation  to  oi»  better  suited  to  the   situation* 


If  many  s a 


lesmen  are  failing  because  they  are  not  aggressive. 


persistent,  and  forcible,   or  because  they  have  not  the  proper 
personality,   poor   selection  methods  are  being  used.     More  careful 
attention  to  the   selection  of   salesmen  in  a  case  like  this  will 
certainly  reduce  the  turnover  • 

Whatever  the  cause  of  turnover^    if  proper  records  are  kept 
and  analyzed,  this  cause  ivill  be  disclosed.     Once  disclosed,   it  may 
be  eliminated  and  turnover  automatically  reduced. 

The  reduction  of   sales  expense   is  an  objective  which  sales 
executives  are  constantly  striving  to  reach*     Serious  study  of  the 
facts  of    salesman  turnover  will  reveal  one   important   line  along  "rohich 
real  advances  toward  that  objective  can  be  made* 


—  I 


Date  Due 


! 

1 

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rii^Q 

1 

A 

89? 

'^'^2  71360 

i 

( 

i 

1 

1 

SEP 2,.,,   ^-11^4W 


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HAY  "  8  1927 


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END  OF 

TITLE 


